A leading police figure says the way public sector contracts are handed out must be tightened up in an effort to freeze out firms with gangster links.

According to Gordon Meldrum, director general of the Scottish Crime and Drug Enforcement Agency (SCDEA), the contracts are prone to "infiltration" by hardened criminals.

To stop undesirables from muscling in, Mr Meldrum says a change in the law is a distinct possibility.

Following meetings with a range of public bodies , the director general told the Herald newspaper: "As yet we don't know whether this will require a change in primary legislation. This is a complex issue which we can not solve in the next twelve months. But we need to identify tangible ways to tighten up the procurement process.

"It is very prone to infiltration by serious organised crime groups and it is positive that we are now working with them to harden the procurement system. I have been heartened by their response and by the clear appetite to work with us to make life more difficult for serious organised crime groups."

Public sector spending on goods and services across Scotland, in areas such as health and education, amounts to around £8 billion a year, with strict procurement guidelines governing the purchasing of these goods and services.

Individual police forces have announced measures to tackle the issue, including telling public bodies like councils, if they are considering giving contracts to firms linked to serious organised crime.

Copyright © Press Association 2009

www.sdea.police.uk (Scottish Crime and Drug Enforcement Agency)

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Morgan Cole comments:

Under the existing law, public authorities can already exclude bids from organisations which have links with organised cime, terrorism, money-laundering and so on. Changes to the law would require Europe-wide approval as they could affect the ability of firms to compete across the EU. However, this underlines the care which public bodies should take in vetting bidders for public contracts and where appropriate, they should seek advice from the police and law enforcement agencies.

To discuss this article in more detail, please contact Simon McCann, Partner in our Commercial team.